IAI Actuarial Core Principles · Business Management · Characteristics of a profession and the Actuaries' Code
Meera, a life actuary at an Indian insurer, is asked by her chief executive to finalise a reserving report. She believes the assumptions are reasonable, but the CEO wants the wording changed so that a material uncertainty in the lapse assumption is left out, because it might worry the board. Which action is most consistent with the Actuaries' Code?
Meera should keep the material uncertainty in the report and explain it clearly. The Actuaries' Code requires communications that are clear and not misleading, and employer pressure does not remove that duty. Omitting or hiding the point would mislead the board.
- ARemove the uncertainty, since the CEO is her employer and decides what the board sees
- BKeep the material uncertainty in the report and explain it clearly, even if the CEO objectsCorrect
- CMove the uncertainty to a footnote so the report is technically complete
- DLeave it out now and mention it orally at the next meeting
- Resign immediately without discussing the issue with anyone
Explanation
The Code requires communication that is clear and not misleading, and material uncertainties must be communicated to those relying on the work. Employer pressure does not override this duty. Burying or omitting the point risks misleading the board, and resigning without trying to resolve it is premature.
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